Asian stocks fall on growth fears

Asian stocks declined for the first week in four, with the region’s benchmark index retreating from the highest level since May, on signs of slower growth in the US and China and amid concern Europe’s leaders were not making progress in solving the region’s debt crisis.

The MSCI Asia Pacific Index slid 0.4 percent to 120.28, erasing an advance for the week during the final day of trading. The gauge closed on Thursday at the highest level since May 4, before a weaker-than-expected employment report and wilting consumer confidence dragged it lower. About five stocks fell for every three that rose through the week.

“The rally seems to have been a bit more about hope over reality,” said Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State Global Asset Management. “Clearly economic data has been pretty poor. The practicalities of what needs to be done to address this are huge.”

Stocks on the index were valued at 12.6 times estimated earnings on average, compared with 13.7 for the Standard & Poor’s 500 Index and 11.6 for the STOXX Europe 600 Index, according to data compiled by Bloomberg.

Pegatron fell by the maximum daily limit of 7 percent to NT$37.00 after the company said earnings plummeted by 35.6 percent from the first quarter.

“The lower-than-expected earnings released by Pegatron yesterday [Thursday] have made many investors wary. There have been fears that more negative leads will come next week before the deadline,” Grand Cathay Securities (大華證券) analyst Mars Hsu (徐振家) said, referring to the Aug. 31 deadline for companies to report second-quarter results.

However, select market heavyweights, in particular HTC Corp (宏達電), staged a technical rebound to prevent the index from falling further as investors took advantage of their relatively low valuations after a recent slump, dealers said.

The smartphone vendor gained 4.8 percent to NT$262.50 on Friday on hopes it would launch new products next month to boost sales.

Japan’s Nikkei 225 Stock Average lost 1 percent this week and South Korea’s KOSPI slid 1.4 percent. Australia’s S&P/ASX 200 Index retreated 0.5 percent as Reserve Bank of Australia Governor Glenn Stevens said policymakers were prepared to respond in the event the economy slows, predicting the nation’s mining investment boom has at least another year before easing.

Hong Kong’s Hang Seng Index declined 1.2 percent and the Shanghai Composite Index slid 1.1 percent. China may have overstated its industrial production data for this year to conceal the economy’s weakness, Dallas Federal Reserve economists Janet Koech and Jian Wang wrote in a paper. Separately, HSBC Holdings PLC cut China’s growth forecast for this year to 8 percent from 8.4 percent.

In other markets on Friday:

Wellington lost 1.11 percent, or 40.75 points, from Thursday to close at 3,622.59.

Manila was 1.14 percent, or 59.49 points, lower from Thursday at 5,143.35.